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TCS close to acquiring 2 firms in Latin America for Rs 200 cr

The $4.3 billion Indian IT services provider, Tata Consulting Service (TCS), is close to acquiring two IT firms in Latin America.

The estimated value of these two firms is around Rs 200 crore. TCS, with a considerable presence in Latin America, has completed due diligence of the targeted companies.

Sources close to the development said that TCS was looking at one business process outsourcing (BPO) company and an IT services company.

These companies have a headcount of nearly 100 each. These acquisitions would enable TCS to outsource various business activities at much lower cost compared with other international locations.

“The proposed acquisition could be in Mexico and Brazil,” sources said. A senior TCS executive declined to comment on the issue. Gabriel Rozman, president (Latin America), TCS, declined to divulge any details.

TCS announced some time ago that it was expanding operations in Latin America by setting up its first global delivery centre (GDC) at Guadalajara in Mexico.

“Apart from a strong domestic IT market, Mexico shares a similar time zone with the US and is within 5-6 hours of flying distance from anywhere in the US, allowing us the ability to provide nearshore services for our large US client community,” N Chandrasekaran, executive vice-president and head of global sales and operations, TCS, had said.

Over the last five years, TCS has set up operations in 14 countries including major centres in Argentina, Brazil, Chile and Uruguay, employing over 5,000 persons and catering to more than 150 clients. Revenues from its Latin American operations touched $159 million (around Rs 650 crore) in 2006-07.

The Indian IT major also acquired 100 per cent control of its Brazilian joint venture, TCS do Brasil, which has over 1,700 employees and recorded revenues of $66.5 million (around Rs 273 crore) in FY07.

“Mexico holds the most attractive position among the Latin American countries we studied,” according to a recent McKinsey Global Institute (MGI) study titled ‘Shaping a new agenda for Latin America’.

Source : Business Standard

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